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The Canadian startup scene is an interesting and enjoyable one. But let's please allow the numbers to speak for themselves. If there's one thing I dislike about
by 9oliYQjP 16y ago
The Canadian startup scene is an interesting and enjoyable one. But let's please allow the numbers to speak for themselves. If there's one thing I dislike about the past few years of the startup scene, it has been this circle jerk echo chamber of "we're great, let's all go for a drink to celebrate".
Canada has a broken VC industry. Our telecom industry is indeed backwater. People are getting into startups because there's no other option for them, and the startup jobs offer lower pay with fewer benefits. This would be a great tradeoff if Canadian startups actually thrived to the point where early employees could make back their investment. But the track record is fairly poor there. Government grants and funds prop up a large percentage of Canadian startups for the 5 years or so that they manage to survive.
These are problems we face today with solutions that will require long term thinking to resolve. I think we have the right attitude at all levels in this country. All levels of government across the political spectrum are on the entrepreneurship bandwagon, and there is no longer a stigma to starting a business. It is actually quite trendy to the point that everybody and their brother is doing it. But let's please improve our track record by staying in business, and in fact thriving as a startup as opposed to flaming out after a year or two when the government grants and initial investment are burned through.
- imack 16y ago"Government grants and funds prop up a large percentage of Canadian startups for the 5 years or so that they manage to survive." I used to work for one of these. Being greentech is a great way to have a the government be your VC. I remember one of the "signs to leave" was when the CEO popped a champagne cork when we got a couple million in funding from the feds. The best part was that the CEO used to be senior aide to an environment minister. He popped a champagne cork because he best navigated the bureaucracy he helped setup. Any company that can get those funds can usually also get some kind of private funding, but why bother when the feds won't ask for equity? It really distorts things though, as VCs care about your company making money, whereas the government cares about you hiring as many people as possible.
- igrekel 16y agoRight and that is also reflected on grants based on salaries you paid the previous year, not exactly straightforward when you are just a few founders and not much cash yet.
- jman73 16y agoHey - I agree, the circle jerk is not helpful. But also understand that many of these companies have been started by people who have indeed built scalable businesses, sold, and started again. Rypple, Dayforce, Swix and others, for example. I don't agree that the problems need "long-term thinking". They need more people to go out and kick ass. In particular, by learning how to SELL AND MARKET. The point of the post is to suggest that Canadian culture (and yes, it is a stereotype) was not particularly supportive of this capacity. Now, with a bottom-up sale over the web Canadians have a more natural route to sell and market.
- 9oliYQjP 16y agoSorry if I read too much of my own bias into your blog post. I agree that selling is what's important. The web has definitely helped Canadians in that respect, as our startups can now compete on an equal level with American players. In fact, as you alluded to, the startup scenes up here are big in the major cities precisely for the reason the scene is big in places like San Francisco (e.g., close proximity to good educational institutions, the right culture, etc.).
- dstein 16y agoCanada lacks tech VC because the whole investment market is structured for mining and oil companies. Through the TSX Venture Exchange small companies (eg. one guy) can raise funds to buy land exploration rights and go off and start a mining company. But you probably won't find any Canadian software companies that got their start this way.